The objective is to grow its net assets by selecting stocks that are listed primarily on the international equity markets, and to outperform the MSCI World index, over the recommended investment period.
Returning volatility, fears of a trade war and a fall in US 10-year yields led to an equity market correction and renewed interest in the defensive sectors. Worldwide, utilities and real estate stocks posted gains in March, while cyclicals and technology stocks fell -3% in euros. Global Value's portfolio help up slightly better in relative terms, thanks in particular to its health and energy sector holdings. While oil closed the month at around $65/bbl on the WTI, near its 2018 peaks and reaching a four-year high, energy stocks began a modest rebound. This was supported by a disciplined approach from management (focusing on shareholder return and low capex growth), as well as sector rotation during the month. The health sector remained under pressure in March, but the fund benefited from Allergan's gains after a bold management speech arguing that a strategic review was urgent. Meanwhile, Shire also made gains, following confirmation of interest by Japan's Takeda, which is likely to make a formal offer in April. In an environment with long-term rates falling again and the yield curve flattening, US bank stocks had a heavy impact on the portfolio's absolute performance. For example, Bank of America saw its annual gains wiped out despite expectations of over 30% earnings growth this year, and Congress's approval for bank regulation reform. This correction is, we feel, more the result of a valuation-multiple compression phase, rather than an adjustment linked to lower earnings expectations.
Share class (K-GBP)
(1) The rating grades the funds on a scale from 1 to 7. This rating system is based on the average fluctuations of the net asset value over the past five years. It corresponds to the variation range of the portfolio upwards and downwards. If the net asset value is less than 5 years old, the rating is determined by other regulatory calculation methods. Historical data such as those used to calculate the rating may not be a reliable indication of the future risk profile. The current category is neither a guarantee nor an objective. Category 1 does not signify a risk-free investment.